A Memorable Report

Trading could begin to dissipate as we close out the spring and head into the Memorial Day holiday weekend. However, several important earnings reports are on the slate this week that could provide memorable news. The economic slate is generally light, though it is heavy with new manufacturing and housing data. The most memorable news of the week will likely come from the Federal Reserve, with a scheduled meeting minutes release. Also, Ben Bernanke will be testifying before the Joint Economic Committee of Congress in this week’s must see TV.

Monday

The first bit of data to reach the economic wire Monday will be the Chicago Fed’s National Activity Index at 8:30 AM ET. The CFNAI measures national economic activity. This will be the reading for April, after March produced an index level of -0.23, down from an upwardly revised 0.76 in February. The three-month moving average for the CFNAI fell to -0.01 in March. Readings below zero do not necessarily signify economic contraction, but a slower rate of economic growth than long-term trend. There is no economists’ consensus estimate available for this data point.

Federal Reserve Chairman Bernanke delivered an address entitled Economic Prospects for the Long Run on Saturday, which could affect stocks Monday. Regional Fed Bank Presidents Charles Evans and John Williams are scheduled to speak on Monday.

President Obama is meeting with the president of Myanmar.

Stock markets are closed in Canada for Victoria Day, and also in Austria, Switzerland and several other nations for various reasons.

The Financial Industry Regulatory Authority (FINRA) has its annual conference in Washington DC starting Monday and closing on Wednesday.

In corporate news, look for the analysts meeting of Kennametal (NYSE: KMT) Monday. The UBS Global Healthcare Conference highlights presentations by Merck (NYSE: MRK) and AmerisourceBergen (NYSE: ABC). The Wunderlich Securities Investor Summit highlights the story of Waste Management (NYSE: WM). The Wells Fargo Gaming and Hospitality Conference Highlights the presentation of International Game Technology (NYSE: IGT). Look for earnings reports from PVH Corp. (NYSE: PVH), Urban Outfitters (Nasdaq: URBN), Campbell Soup (NYSE: CPB), China New Borun (Nasdaq: BORN), China Xiniya Fashion (NYSE: XNY) and eFuture Information Technology (Nasdaq: EFUT).

Tuesday

The regular weekly retail same-store sales report of the International Council of Shopping Centers (ICSC) is the only economic report on tap for Tuesday. Last week’s report covering the period ending May 11 showed a week-to-week sales decrease of 2.0%, following the 1.0% drop the week before. On a year-to-year basis, sales were higher by 1.2%, versus the 2.4% increase in the prior week.

Dallas Federal Reserve Bank President Richard Fisher is scheduled to talk about the economies of the nation and Texas Tuesday.

The House Agriculture Committee is having a hearing on “The Future of the CFTC: Market Perspectives.”

Secretary of State John Kerry travels to the Middle East to speak with Israeli and Palestinian territory leaders.

In corporate news, the shareholders of J.P. Morgan Chase (NYSE: JPM) are due to decide, though in a non-binding vote, whether to split the roles of Chairman and CEO, defining Jamie Dimon’s future at the bank. Look for other investor and analyst meetings at MetLife (NYSE: MET), Motorola Solutions (NYSE: MSI), Williams Cos. (NYSE: WMB), Juniper Networks (Nasdaq: JNPR) and The Gap (NYSE: GPS). The UBS Global Healthcare Conference highlights presentation by Amgen (Nasdaq: AMGN). The Barclays Americas Select Franchise Conference produces the presentation of CVS Caremark (NYSE: CVS). Look for earnings news from Home Depot (NYSE: HD), Medtronic (NYSE: MDT), Analog Devices (NYSE: ADI), Best Buy (NYSE: BBY), TJX Companies (NYSE: TJX), NetApp (Nasdaq: NTAP) and more.

Wednesday

In the morning, Federal Reserve Chairman Bernanke testifies on the economic outlook before the Joint Economic Committee of Congress. Bernanke’s perspective matters more to markets now than ever, because with every poor economic data point, the market seeks to rally on the hope of ongoing Federal Reserve support. The day the Fed raises concern about its ability to affect the economy or if inflation becomes an issue, stocks will lose that support. Also, St. Louis Fed President James Bullard gives a guest lecture at a university in Germany.

At 2:00 PM ET, the Federal Reserve publishes the minutes of its last meeting, shedding more light on the intimacies of the discussion in-bank. Like Bernanke’s testimony, this could be a market moving event, because what it sheds light on is of utmost importance to equity investors today.

The Bank of Japan (BOJ) will publish its latest monetary policy decision Wednesday, and given the importance of Abe-economics to currency values and to Japanese stocks, investors will be paying attention.

The Bank of Cyprus’ Governor will address a conference in Nicosia.

The latest mortgage activity data arrives from the Mortgage Bankers Association Wednesday before the market open. Last week’s report covering the period ending May 10 showed mortgage applications decreased by 7.3%. Applications tied to the purchases of homes decreased by 4.0% on a seasonally adjusted basis. The Refinance Index decreased by 8.0%. Effective mortgage rates increased significantly and seemed to freeze the market, leading me to author, Be Very Afraid: Higher Rates Killed Mortgage Activity. We’ll see what happens this week, given all the Fed activity.

When Existing Home Sales data was reported for the month of March, it was supposed to show the annual pace of sales breaking the 5.0 million threshold, but it missed that mark, reaching just 4.92 million. For April, economists expect the pace to make 5.0 million exactly, but the spring selling season is coming to a close now.

Look for the EIA’s regular Petroleum Status Report at 10:30 AM ET. Last week’s report covering the week ending May 10 showed crude oil inventory decreased by 0.6 million barrels, and remained above the upper limit of the average range for this time of year. Total motor gasoline inventory increased by 2.6 million barrels and marched into the upper half of the average range for this time of year.

Look for investor or analyst meetings at Boeing (NYSE: BA), Aflac (NYSE: AFL), Thermo Fisher Scientific (NYSE: TMO), Prestige Brands (NYSE: PBH) and Citrix Systems (Nasdaq: CTXS). Tyco International (NYSE: TYC) is appearing at the Electrical Products Group Conference. JDS Uniphase (Nasdaq: JDSU) is presenting at the Barclays Global Technology, Media & Telecommunications Conference. Abbott Laboratories (NYSE: ABT) is presenting at the UBS Global Healthcare Conference. The EPS schedule highlights reports from Hewlett-Packard (NYSE: HPQ), Target (NYSE: TGT), Staples (Nasdaq: SPLS), L Brands (NYSE: LTD), PetSmart (Nasdaq: PETM) and Lowe’s Companies (NYSE: LOW).

Thursday

Jobless claims spiked last week and so investors will be attuned to the Weekly Initial Jobless Claims report, which is due at 8:30 AM ET. Last week’s report covering the period ending May 11 showed weekly claims increased by 32K, to 360K. Economists see claims dropping back to 345K this week. The 4-week moving average increased by 1,250 last week to 339,250.

Manufacturing weakness has been well-documented here, and the PMI Manufacturing Flash Index will add to the picture this morning. Economists expect the index to fall to 50.8 in May, after its last reading for April at 52.1. This figure has been trending lower over recent months. The Kansas City Fed’s Manufacturing Survey is up for report as well at 11:00 AM Thursday morning. The KC Fed’s Index is expected by economists to continue to show regional contraction, though less of it in May, with the consensus forecast set for a reading of -2.0, better than April’s -5.0. Though, economists expected improvement last month as well, and the figure held where it was.

St. Louis Fed-man James Bullard is scheduled to address a group in London at approximately 6:00 AM ET. ECB Chief Mario Draghi takes part in the “Future of Europe in the Global Economy” meeting in London as well.

We will receive two housing data points as well Thursday, with the FHFA House Price Index and the latest New Home Sales data due. The FHFA House Price Index is expected to show prices rose by 0.9% in March, which would be better than February’s increase of 0.7%. The trend here has been one of accelerating price rise, with January showing a 0.6% increase and December showing a 0.5% rise. Investors can look for the New Home Sales data for April at 10:00 AM. Economists expect the annual pace of sales to have edged up a bit to a pace of 425K in April, from 417K in March.

The Bloomberg Consumer Comfort Index, a weekly measure of the consumer mood, deteriorated by another 0.7 points last week, and reached a mark of -30.2. I expect the index to revisit even lower levels before long. Consumers are not generally in a good mood today, but the latest data from the University of Michigan Consumer Sentiment measure begged to differ, rising last week to 83.7, from 76.4.

The EIA’s Natural Gas Report is due Thursday at 10:30 AM. Last week’s report covering the period ending May 10 showed working gas in storage increased by 99 Bcf. Stocks were 694 Bcf less than last year at this time and 83 Bcf below the five-year average for this time of year.

In corporate news, look for meetings at Johnson & Johnson (NYSE: JNJ), Sempra Energy (NYSE: SRE), Time Warner (NYSE: TWX) and Home Depot (NYSE: HD). Xerox (NYSE: XRX), RF Micro Devices (Nasdaq: RFMD) and Scripps Networks Interactive (NYSE: SNI) are presenting at the Barclay’s Global Technology, Media and Telecommunications Conference. Several companies are coming to market through IPO today, with Ply Gem Holdings, Global Brass & Copper and Holdco all expected to price. Look for earnings from The Gap (NYSE: GPS), Ross Stores (Nasdaq: ROST), GameStop (NYSE: GME), Ralph Lauren (NYSE: RL), Dollar Tree (Nasdaq: DLTR) and Salesforce.com (NYSE: CRM).

Friday

Durable Goods Orders will be reported for the month of April this morning. This is a volatile measure and a difficult one for economists to peg because of the high ticket price of durable goods. For this reason, the data comes with and without the especially high-priced transportation segment data. For this month, economists expect durable goods orders to rise by 1.1%, after March’s decline of 5.7%. Excluding transportation, though, durables are expected to just inch up by 0.4%, after falling 1.4% last month.

The corporate wire has meetings at Cerner (Nasdaq: CERN) and Telephone & Data Systems (NYSE: TDS). The earnings wire has news from Abercrombie & Fitch (NYSE: ANF), Destination XL Group (Nasdaq: DXLG), Hibbett Sports (Nasdaq: HIBB), Foot Locker (NYSE: FL) and more.

The bond markets will close early today at 2:00 PM ET due to the Memorial Day holiday weekend.

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